Elkins and Live-Witness Testimony

The most important new rule in decades affecting the experience of California
Family Law litigants is set to be unleashed on January 1, 2011.

It promises a radical change in the way that all family court proceedings
- whether they be dissolutions, legal separations, annulments, support
applications, custody, and modifications of all of the above - are processed
and decided by Superior Court judges and commissioners.

This is a result of the Elkins Task Force, which has been quietly operating
in the background of the California family law world since roughly August
6, 2007, when the game changing case of
Jeffrey Elkins v. Superior Court (2007) 41 Cal.4th 1337 was decided by our California Supreme Court.

Elkins was a landmark decision which held that the Contra Costa County
Superior Court could not through its local rules limit parties in marital
dissolution actions to introducing evidence in written declaration form
that had to be submitted in advance of trial, or prohibiting except in
"unusual circumstances" one party from cross-examining the other
about the contents of those declarations. Such a rule, intended for the
sake of calendar management and judicial economy, not only had the practical
if unintended consequence of favoring parties with attorneys who understood
how to work with these rules but fundamentally it violated due process
by cutting off litigants' abilities to present all relevant, competent
evidence on material issues. Judges, as the triers of fact, are not able
to assess witness demeanor and credibility without live testimony.

What is earth shattering about this decision in these economic times is
that the Contra Costa Superior Court had urged that its policies and local
rules were essential for the "expeditious resolution of family law
cases." Soon to be former Chief Justice Ronald George rejected this
justification:

"We are aware that superior courts face a heavy volume of marital
dissolution matters, and the case load is made all the more difficult
because a substantial majority of cases are litigated by parties who are
not represented by counsel. [Reference omitted]....

In light of the volume of cases faced by trial courts, we understand their
efforts to streamline family law procedures. But family law litigants
should not be subjected to second-class status or deprived of access to
justice. Litigants with other civil claims are entitled to resolve their
disputes in the usual adversary trail proceeding governed by the rules
of evidence established by statute. It is at least as important that courts
employ fair proceedings when the stakes involve a judgment providing for
custody in the best interest of a child and governing a parent's future
involvement in his or her child's life, dividing all of a family's
assets, or determining levels of spousal and child support....

Trial courts certainly require resources adequate to enable them to perform
their function. If sufficient resources are lacking in the superior court
or have not been allocated to the family courts, courts should not obscure
the source of their difficulties by adopting programs that exalt efficiency
over fairness, but instead should devote their efforts to allocating or
securing the necessary resources."

Justice George ended by directing the California Judicial Council to create
a task force (the 'Elkins Task Force) "to study and propose measures
to assist trial courts in achieving efficiency and fairness in marital
proceedings and to ensure access to justice for litigants, many of whom
are self-represented. Such a task force might wish to consider proposals
for adoption of new rules of court establishing state wide rules of practice
and procedure for fair and expeditious proceedings in family law, from
the initiation of an action to postjudgment motions. Special care might
be taken to accommodate self-represented litigants. Proposed rules could
be written in a manner easy for lay-persons to follow, be economical to
comply with, and ensure that a litigant be afforded a satisfactory opportunity
to present his or her case to the court." Hence, the Elkins decision
is essentially a Jeffersonian ruling that its intended to empower family
law litigants and to require counties and courts to adapt.

The Elkins Task force completed its work and has issued lengthy recommendations.
The first changes take place on January 1, 2011. Possibly the most important
change is embodied in
Family Code section 217. It states:

"(a) At a hearing on any order to show cause or notice of motion brought
pursuant to this code, absent a stipulation of the parties or a finding
of good cause pursuant to subdivision (b), the court shall receive any
live, competent testimony that is relevant and within the scope of the
hearing and the court may ask questions of the parties.

(b) In appropriate cases, a court may make a finding of good cause to refuse
to receive live testimony and shall state its reasons for the finding
on the record or in writing. The Judicial Council shall, by January 1,
2012, adopt a statewide rule of court regarding the factors a court shall
consider in making a finding of good cause.

(c) A party seeking to present live testimony from witnesses other than
the parties shall, prior to the hearing, file and serve a witness list
with a brief description of the anticipated testimony.

If the witness list is not served prior to the hearing, the court may,
on request, grant a brief continuance and may make appropriate temporary
orders pending the continued hearing."

Family Code section 217 will cause a sea-change in day to day family court
proceedings across our state, unless family court judicial officers ignore
it to the limited extent possible by court rules. It will likely have
immense financial and resource consequences upon not only the courts but
upon parties to family court proceedings. It will force the state government
in coming years to study whole new paradigms for resolving divorce and
domestic partnership dissolution outside the adversary template, including
those currently practiced in New Zealand and southern Australia.

It will also pressure parties to consider mediation, and collaborative
processes which occur outside congested courthouses, much more carefully.
The costs of adversary litigation are about to sky-rocket, making mediation
even more appealing from a financial perspective (I have written extensively
about the emotional and psychological benefits here an elsewhere). There
simply is no governmental money available to absorb the coming Elkins
Onslaught. For more information about an alternative method for resolving
family disputes, please visit us at
www.DesertFamilyMediationServices.com.

At the same time, at least in the short run taken together with some of
the other revisions that become effective next month, it may encourage
more people to litigate more stubbornly and so make mediation seem less
attractive than it did before the changes (just the reverse will be true).
Some folks will mistakenly assume that this invites the use of court hearings
as a live-testimony forum for sharing unresolved complaints relating to
their marriage or domestic partnership dissolution with the other party
in open court. Instead, judges will sustain objections to such irrelevant
material and parties who seek to use Family Court as a platform to air
relationship grievances will find themselves alienating the trier of fact
in ways that will have adverse consequences to them beyond just the time
and expense of the exercise.

The purpose of today's Blog is to introduce you to section 217 and
the new changes. I will follow up with more articles in coming weeks.
Without a doubt the new rules will make all the information I provide
on my websites more relevant and timely for my readers.

December is new legislation month at the Southern California Family Law
Blog presented by Family Law Attorney Thurman W. Arnold. My goal is to
inform you well, and early on, on any number of topics that will improve
your outcome in family law matters and hopefully help you to reach results
that are fair for you, your spouse or ex-partner, your children, and your
blended and extended families.

We are excited to give you advance notice that the first family law mediation
center in the Coachella Valley is opening its offices in Palm Springs
on June 15, 2010. Our hope and expectation is that we will be providing
much needed peacemaking and reconciliation services to couples involved
in relationship difficulties who live within the inland desert cities'
empire, including all of Riverside and San Bernardino counties. We invite
diversity in our clientèle in all sizes, shapes, colors, and combinations!

Former Judge Taylor was admitted to the Bar in California in 1979. She
has practiced family law almost exclusively in the 31 years since. She
is a Certified Family Law Specialist. Her practice was devoted to divorce
and families in Beverly Hills until she became a Commissioner of the Indio
Superior Court in Indio, California, in 1997. While in Indio she was one
of two family court judges for the eastern Riverside County communities
(excluding Blythe).

In 2003 Judge Taylor's assignment changed to the downtown Los Angeles
Superior Court. She served as a family court commissioner in Los Angeles
until 2009, when she retired and so left the bench. She has developed
a particular expertise with high-conflict, high-asset dissolutions, domestic
partnership breakups, but she cares deeply about all manner of relationship
difficulties, small and large.

Since retiring in 2009 she has served privately as a family court referee,
special master, private judge, and mediator for families residing in Los
Angeles County, Orange County, Riverside County, and neighboring cities.
She resides primarily in the Coachella Valley.

Thurman W. Arnold is a Palm Springs' native and was admitted to the
practice of law in 1982. He has been practicing law from his offices in
Palm Springs since that time, and exclusively handles family law and related
matters. He recently passed the California State Bar Certification Examination
and so is eligible to become a Certified Family Law Specialist this year.
He frequently serves as a Judge Pro Tem of the Riverside County Superior
Court in Indio.

Retired Judge Taylor and Attorney Arnold are committed to serving couples
- and their children - and to managing the resolution of your disputes
sensibly and with dignity. Mediation is a far better alternative to adversary
court dispute litigation, and we as seasoned professionals know this fact
first hand.

Judge Taylor is not a member of the Law Firm of Thurman W. Arnold -
Desert Family Mediation Services is an enterprise completely separate from Mr. Arnold's law practice.
Indeed, former Judge Taylor is not available to represent individual parties
in dissolution cases or in any other family law proceedings.

We are overjoyed to share our expertise in helping couples resolve their
breakups neutrally, economically and safely. In addition to mediations,
we will be available to conduct private settlement conferences and to
assist with parenting plans and parenting coordination.
Please watch for us!

We and other passionate mediators are available for free initial consults.

The website for DFMS launches on June 15, 2010, If you find the information
contained in this website useful, you might share our excitement concerning
what is about to become available to all those who find it!

Our heartfelt desire is to share the wisdom accumulated over many years
in order to spare you and your family from unnecessary suffering.

Desert Family Mediation Services offers a peacemaking alternative to family court.

Q. Can I file for legal separation in California if I just moved here from Arizona?

In order to be entitled to file an action for legal separation, a spouse
does not need to be a resident of the State of California when they file;
this is not true for divorce. To be legally entitled to file a dissolution
proceeding here, you must either already be a California resident temporarily
living elsewhere, or you must have been physically present in this state
for at least six months.

For example, assuming Mrs. Smith from Idaho moved to California two months
ago and now wishes to dissolve the marriage in this State, she has not
yet met the California residency requirements for divorce and if she files
an action for dissolution it will be denied - especially if Mr. Smith
objects that she is not a resident of this State. But perhaps Mrs. Smith
is in immediate need of spousal support - she is fleeing domestic violence
by Mr. Smith who is a raging alcoholic - in that case, even though she
is not domiciled here and has not been here for at least six months, she
can file an action for legal separation and obtain temporary support orders
and possibly attorney fees against Mr. Smith, so long as there is a basis
for California to assume jurisdiction over Mr. Smith once he is served.

After the time has passed (6 months) for Mrs. Smith to establish her residency
here, she is entitled to amend to the Petition to now seek a divorce.
In the meantime, she has been protected. (While a California Court can
always dissolve a marriage, in order for property or financial orders
to be valid as against Mr. Smith, California must have jurisdiction over
him by way of his presence here at least at time of service, his consent
to jurisdiction, or other legally sufficient contacts with this state).

Please note, however, that Legal Separations can only be granted by mutual
consent, or where the other party fails to respond in the action and so
the Judgment is entered by default. Also, divorces filed in other states
trump legal separations filed in California for purposes of forcing you
back there to litigate if you spouse wishes to go that route.

My wife she used her INHERITANCE to buy our home. We are getting divorced.

Posted By Thurman Arnold, III

Q. My wife and I separated in June 2009. When we purchased our home in
March of 1998 (married December 1994), she used part of an inheritance
from her grandmother to help with the down payment. I have been paying
the mortgage since we bought it. Will she get her inheritance back in
our divorce? What would I get?

Howard, Seal Beach, CA

Because I need more information and the answer to some questions and then
to follow up questions, I can only give you a generalized response.

Family Code Section 2640

So long as your wife can trace the portion of her downpayment contribution
to the inheritance, she is entitled to a
Family Code section 2640 reimbursement in the amount that she proves by this tracing. However, she has the burden
of proof and problems arise for her if the monies were commingled into
a joint account. Does she have the necessary records? If this is a lengthy
marriage, I'd bet not.

She is not entitled to interest on grandma's gift to her, however,
but only the principal. However, this assumes that the downpayment contribution
always remained separate from any other money or bank assets that you
had an interest in, or that the community had an interest in: If the inheritance
monies were commingled with joint monies or your separate funds between
the date she received them and the date they were used as part of the
purchase price for the home, then a further tracing is required to establish
that what money in the account at that time was her separate and what
amount was something else.
Here is a Blog article that discusses tracing principles in more detail.

You don't report whether you were on title to the residence when escrow
closed or at any later time. Whether or not you were on title when the
property was purchased, it is presumed to be community property UNLESS
you (a) deeded off when escrow closed or deeded off since that time or
(b) consented to or are deemed to have consented to your Wife being the
sole record title holder if at the close of escrow title issued in her name.

If you were on title at close of escrow and to the present day, the answer
is easy - your Wife gets her traced inheritance money first, off the top,
from any equity in the home. She does not get interest on the money. The
remaining net equity, without other facts, belongs to the community so
that each of you is entitled to one-half of what remains.

If you were not on title when escrow closed, and if you cannot rebut by
clear and convincing evidence the legal presumption set forth in
Evidence Code section 662 (based upon form of taking title in her name alone) that you consented
to that outcome, then (a) your Wife still gets her downpayment back and
(b) the community estate is entitled to be reimbursed for carrying the
mortgage all those years and reducing the principal balance due the mortgage
holder. It doesn't matter who paid the mortgage, so long as it was
paid from community earnings during the marriage.

Moore-Marsden Apportionments

There is a very important reimbursement concept under California Law known as
Moore-Marsden apportionment. It applies to a common situation where a home is acquired before marriage
(or during marriage as separate property), title is in the name of the
acquiring spouse alone, and during the marriage and up to separation or
divorce and there is or was a mortgage that was paid during the marriage.

Where this occurs the community estate acquires a legal, reimbursable,
interest in what would be otherwise be entirely the separate property
of the titled spouse IF community funds (earnings of either spouse, for
instance, or both) are used to make the mortgage payments. The idea is
that joint funds are being used to benefit a separate property interest,
i.e., the separate property equity. Many legal scholars consider this
to be a breach of fiduciary duty - that whenever one or the other spouse's
separate property interests are increased with community funds, or community
time, skill, and efforts of either spouse during the marriage, the community
is disadvantaged and that this disadvantage violates the statutory duties
of the parties that place the party's joint interests above their
separate interests.

The formula for apportionment is that the community acquires a pro tanto
(dollar for dollar) interest in the ratio that principal payments on the
purchase price made with community property bear to payments made with
separate property. Hence, any increase in value (appreciation) must be
apportioned accordingly between the separate property and the community
property estates upon separation or dissolution.

Note that this only applies to separate property owned prior to marriage
with a mortgage that was paid during marriage where an equity position
has been increased. For instance, if a mortgage exists but it is an interest
only, payments during marriage do not reduce principal. Therefore, the
separate interest of the owner spouse is not improved because the debt
remains exactly the same. As a general rule, the amounts paid for interest,
taxes, and insurance on the house are disregarded since that portion does
not to contribute to the capital investment.

Also, it assumes that the mortgage was paid with joint (community) funds,
or that the funds used were so commingled that the "separatizer"
is unable to trace them to a separate property source (meaning they don't
have records showing where each payment was made or are unable to provide
a recapitalization of the source of the funds). If your husband reduced
the mortgage throughout the marriage but he did it with an account that
was his separate property then the community would not have this reimbursement right.

The Moore Marsden formula requires a number of bits of information at
important points in time to be properly calculated. These include: a)
what was the original purchase price; b) what was the original mortgage
and downpayment; c) what was the property worth at the date of marriage
(DOM); d) what was owed to the lender at that time; e) what was the property
worth at the date of separation; f) what was owed at that time; g) what
is the property worth on the date of the calculation (i.e., the trial
date); h) and what is the principal pay-off at that time?

This is a good example of why family law and divorce cases can become
quite expensive. Obtaining these records, particularly if you are the
'out spouse' can be difficult, and sometimes a forensic accountant
is the best option for calculating these apportionments. Find a local
CPA with family law experience to help you trace the funds. You need an
experienced family law attorney for these types of matters as well.

Can you give me a MOORE MARSDEN Analysis on My SEPARATE PROPERTY HOME?

Posted By Thurman Arnold

Q. Can you please help. I understand a Moore-Marsden analysis needs to
be performed on my house in my pending divorce, but I don't understand
what it is my attorney is telling me.

These are the facts. On 1/1/02 I put my wife on the title to the property.
This is what happened.

Purchase price 6/92 before marriage

$164,875

Date of Marriage 5/15/94 Market value

$190,000

Market Value 1/1/2002 when Wife goes on Title

$245,000

Market value 4/7/2008

$612,000

Initial 6/92 Down payment

$54,875

Principal Payment from separate prop. after separation

$6,836

FMV today (decreased since DOS)

$500,000

Frederic, in San Dimas

Sample Moore Marsden Analysis

Here is an illustration of how the calculation works. You are attempting
to determine two things: a) the amount of principal reduction on the real
estate during marriage, and assuming the property is titled in only one
spouse's name (or as of the date of transmutation, where both spouses
go on title down the road, if applicable); and b) the percentage share
by the community in the appreciation, if any, during the period in question.

Please see my
FAQ on Moore Marsden generally. As you can see, it is complicated. You will need a forensic
accountant and you may want a real estate expert because fair market values
need to be fixed at various dates. Your situation is even more complicated
because you placed her on title. The simplest Moore-Marsden ("M-M")
situation deals with a property owned in the name of one spouse throughout
the marriage, where marital earnings are used to pay the mortgage down
- the fundamental concept is that the community should get some reimbursement
for this, which comes back as a share in the appreciation and reduced
principal obligation.

You will need to get:

the mortgage payoff balances on the date of marriage;

the mortgage payoff balance on date of the transmutation (when your wife
went on title)

the payoff balance at date of separation

and you will need a mortgage balance near the date of your trial

I want to mention that all transmutations that favor one spouse and disadvantage
the other, like putting her on the deed on 1/1/02, are subject to a claim
that they should be set aside. This is because there is a presumption
that your Wife exerted undue influence upon you - please research my fiduciary
duty blog articles using the on-site search engine if this interests you.

The information on this website is for general information purposes only.
Nothing on this site should be taken as legal advice for any individual
case or situation. This information on this website is not intended to
create, and receipt or viewing of this information does not constitute,
an attorney-client relationship.